Pictures of an Anglo American mine.

Highlights from the results included underlying earnings dropping to $0.8 billion from $2.2 billion the prior year due to falling commodity prices. The company noted that falling prices were seen across the board in the majority of products which had an impact of $4.2 billion on underlying EBIT. Weakening commodity currencies such as the South African rand and Australian dollar partly offset losses however copper prices have fallen by 20% whilst the average iron ore CFR China price is also down 42%.

The companies net debt remained in the same position at $12.9 billion with weaker operational cash flows being offset by a $2 billion reduction in capital expenditure. Overall commodity price-driven impairments of $3.8 billion were seen since the half year which contributed to a statutory loss before tax for the year of $5.5 billion.

Mark Cutifani, Chief Executive of Anglo American, said:

“The global economic environment and its impact on prices have presented the industry with significant challenges during 2015. Against the strong headwinds of a 24% decrease in the basket price of our products for the year as a whole, our ongoing intense focus on operational costs and productivity delivered a $1.3 billion EBIT benefit in the year, providing some mitigation. Overall, our copper equivalent unit costs reduced by a further 16% in US dollar terms, representing a 27% total reduction since 2012.

“Our portfolio transformation is well on track, from c.65 assets in 2013 to 45 today. We completed or announced $2.1 billion(5) of disposals in 2015, including from the sale of our 50% interest in Lafarge Tarmac and the Norte copper assets in Chile, while also agreeing the sale of the Rustenburg platinum operations and two non-core coal assets in Australia, which we expect to complete during 2016.

“Together with operational and cost improvements, significant capex reductions and making the tough decisions with some of our more marginal assets, we have been able to maintain our net debt and liquidity levels at $12.9 billion and $14.8 billion respectively, despite our $4.0 billion(11) of capital commitments for 2015 and the $2.4 billion net EBIT erosion from lower prices and weaker producer country exchange rates.

“We have made significant progress, albeit in an environment that has been deteriorating at a faster pace. Today we are announcing(12) detailed and wide-ranging measures to sustainably improve cash flows and materially reduce net debt, while focusing on our most competitive assets to create the new Anglo American, positioned to deliver robust profitability and cash flows through the cycle.”